Carithers v. Weaver , 7 Kan. 110 ( 1871 )

The opinion of the court was delivered by

Brewer, J.:

The record presents several questions for our consideration. The sale to Elizabeth E. Weaver was made March 30th, 1863, for $200. Within one year, and on the 29th of March, 1864, plaintiff paid to the sheriff who made the sale, and who was still sheriff, for the redemption of said property, $220, the amount for which the property was sold, and ten per cent, interest. The sheriff on the same day tendered the amount to the purchaser, which was refused. A tender of the money is, by the terms of the law, made equivalent to payment. Also payment might be made to the purchaser or for him to the officer making the sale: (§ 5, ch. 171, Comp. L., p. 771.) The redemption might be made by the judg- ■ ment-debtor or his successor in interest; (§2, same chapter.) Here the party seeking redemption claimed title by virtue of a deed from Noble Carithers, the judgment-debtor, made intermediate'the date of the. judgment and the day of the sale. He was therefore the “ successor in interest of the judgment-debtor,” and entitled to redeem. Having performed all that, the law required for the redemption of the property, all interest therein which the purchaser acquired by the sale ceased. This seems to have been conceded on the trial below, (except so far as it is affected by the question presented in the fourth instruction given at the instance of defendants, of which hereafter,) and is referred to, only for the sake of preparing the way to the question we shall now consider. There was some testimony offered upon the trial for the purpose of showing that the deed from Noble Carithers to plaintiff was without consideration, and made for the purpose of defrauding the wife of the grantor. Plaintiff asked the court to instruct the jury, that, “If Mrs. Weaver’s claim has been satisfied by a tender of the purchase money and interest, she has no legal right to complain of plaintiff’s deed from Noble Carithers for want of consideration or good faith,” which instruction was refused by the court, and the refusal excepted to. The court also on application of defendants, gave the following instruction: “5th:-If the jury believe from the evidence that the deed from Noble Carithers to plaintiff was made without consideration for the purpose of defrauding Nancy Carithers, the wife of said Noble Carithers, then such conveyance was void and conveyed no title to plaintiff,” to the giving of which instruction plaintiff excepted.

1. deed-who TOUdSyf1011 lls Was there error in this? Who can question the validity of a deed alleged to have been executed without consideration and with a fraudulent intent ? That fraud m a deed maybe shown, and, being shown, that it avoids the deed, is not a rule of universal application. Where both parties to the deed are privy to the fraud, the law leaves them, where it finds them, and neither party can secure its aid to change'the interests and relations created thereby. Where the grantor alone acts with a fraudulent intent, he is estopped thereafter from setting up such fraud in avoidance of the deed; nor can one claiming under him by descent, or deed subsequent thereto, avoid such conveyance on account of the fraud; he has no greater rights than his ancestor or grantor; 10 Conn., 69; 17 Conn., 492; 15 Mich., 94; 18 Mich; 196; 7 Blackfi, 66. Of course, one who is without interest or equity in the conveyance, or the property conveyed, a mere stranger, cannot be heard to say there is fraud in the conveyance. In the plain and homely language of the day, “ it is none of his business.” Who then may question the validity of a deed alleged to have been executed with a fraudulent intent ? Plainly, he who is injured by the fraud; he who has superior equities in the property conveyed. A deed, fraudulent as against creditors may be set aside by those creditors. Apply these principles to this case: The only interest defendant Elizabeth E. Weaver ever had in the property, as appears from the record, was that acquired by the sale on execution of March 30th, 1863. But that interest, as we have seen, was wholly destroyed by the redemption of March 29th, 1864. Thenceforth she had no interest in the property, no equities to enforce, was in fact a mere stranger. She therefore .was in no position to question the validity of plaintiff’s conveyance. The interest which the other defendant had in the premises was created by a tax deed, resulting from the non-payment of the taxes for the year 1862. Plaintiff’s deed was executed Sept. 29th, 1862. The lien for taxes attached November 1st, 1862. The sale for. non-payment was on May 12th, 1863, and Johnson county was the purchaser. November 7th, 1863, the certificate of sale was assigned to defendant John T. Weaver; May 19th, 1865, the tax deed was executed. Now, whatever may have been the consideration or intention of the deed to plaintiff, it in nowise affected the title which was developing through the tax proceeding. That title was developing in antagonism to the title by deed. No matter who held that earlier title, no matter through how many parties it passed, no matter what the consideration or purpose of the varied conveyances, the title by the tax proceedings moved steadily on to its completion. In short, he who is building up a tax title cannot be hindered by any conveyances on the part of those holding the earlier title, made with or without consideration, with or without fraudulent intent. More than that, the conveyance to plaintiff was long prior to the time •defendant acquired any interest by virtue of the tax proceedings, prior indeed to the time when the lien for taxes attached. Surely, one claiming under a tax title accruing long subsequent to a conveyance has no such superior ■equities that he can question the consideration or good faith thereof. But it may be said that for this error the judgment ought not to be reversed, because from the record it appears that defendant John T. Weaver holds possession under a tax title, which by virtue of the statute ■of limitations has passed beyond question, and that there" fore both verdict and judgment were as matter of law right. We cannot say upon what instruction or refusal io instruct the case hinged in the minds of the jury; perhaps upon those wherein we have just indicated the error.

2. tax t.tm ; Jcqunaennot 3. Tax Deed ; SSteSnimnations. But another question is presented in reference to the tax deed. It was claimed by the plaintiff’, and testimony was offered by him for the purpose of showing, that defendant John T. Weaver entered into possession of these premises as his tenant, and that the terms of the lease were that said defendant should keep the property in repair and pay the taxes; and that while this lease was continuing the taxes became due and payable, from a failure to pay which the defendant’s tax deed arose. There was contrary testimony ; but by all the evidence a question of fact was presented for the jury to decide. Suppose the jury were to find that the facts were as claimed by plaintiff', how would they affect the tax title set up by defendant? Being a tenant in possession, under contract to pay the taxes as par,t rent, he was an agent to pay taxes with funds provided therefor. Appropriating those funds in breach of that trust, he claims thereby to have divested the real owner of his property. Neglecting the duty which by contract he had assumed, he grounds his title on his own misconduct-Not content with, defrauding the owner out of that portion of the rent he promised to pay in such manner, he claims by that very fraud to have wrested from him the entire property rented. As agent, with funds of his principal to. protect that principal’s title, he uses those funds to purchase a title for himself. Will such a transaction stand? That it is fraudulent as against the principal and owner, is clear. That such principal and owner can take advantage of the fraud, is evident from the principles heretofore stated; and that such a fraud will vitiate and avoid the title seems equally clear. Chief Justice Wagner, in Grumley v. Webb, 44 Mo., 451, says: “ Nothing is better settled than that an agent or a trustee or any person acting in a fiduciary capacity, cannot speculate for his private gain with the subject-matter committed to his care, to the prejudice of his principal. He cannot be allowed to purchase an interest in property where he has a duty to perform which is inconsistent with the character of purchaser.” Chief Justice Sanderson, in Moss v. Shear, 25 Cal., 45, uses this language: “If the defendant was under any legal or moral obligation to pay the taxes, he could not, by neglecting to pay the same, and allowing the land to be sold in consequence of such neglect, add to pr strengthen his title by purchasing at the sale himself, or by subsequently buying from a stranger who purchased at the sale. Otherwise he would be allowed to gain an advantage from his own fraud or negligence in failing to pay the taxes. This the law does not permit, either directly or indirectly.” In Blackwell on Tax Titles, page 400, appear these words: “ One in possession of a tract of land at the date of the assessment, may purchase at the sale, unless it appears that he was bound to pay the taxes; in which case he can acquire no title by his purchase.” Also, on page 396; “Also, where an agent intrusted with funds to pay the taxes, violated his trust, and, by a similar arrangement with the purchaser, permitting a sale. These and positive frauds of similar character, of course render the sale void.” And on page 401 : “ Nor can an agent whose duty it is to pay the taxes, become the purchaser of his principal’s land at such a sale.” See also' sustaining these views: 32111., 50; 22 N. Y., 343; 3-Sumner, 476; 36 Cal., 135 ; 14 Wis., 247; 22 Wis., 175 ; 5 B. Monroe, 458; 32 Maine, 305. The fact that a tax deed thus acquired may be regular on its face, or that all the requirements of the statute have been strictly complied with, avails nothings The objection goes not to the proceedings, but to the power of the party to take the title. It is not a defect of form, but a disqualification of person. Nothing passes to him, because he is not in a position to take anything. Nor would the two-years statute of limitation assist. Such a tax deed would be void, and a void deed never starts the statute to running. Taylor v. Miles, 5 Kas., 498; 3 Sumner, 476.

Nor would the fact that the party acquired no interest in the tax proceedings till after the termination of his lease or agency change the case, if during the lease or agency the taxes became due and payable and he then neglected to pay them. The instruction' given by the court of his own motion ignores this principle entirely. It reads thus :

“ The legal effect of the tax-deed in evidence was to pass the entire title to John T. Weaver; and if the jury believe from the evidence that such deed was legally recorded in the office of register of deeds for Johnson county, more than two years previous to the commencement of this suit, the plaintiff is barred, and has no right to maintain a suit to recover possession of said premises.”

With, only this instruction before them, the jury would have little difficulty in disposing of the case, as the tax ■deed had indisputably been on record over three years. True, this instruction was qualified by the sixth instruction given at the request of the plaintiff, as follows: “ If either or both defendants took possession of the premises with a view to taking care of the same, and thereby obtained the confidence of the plaintiff, or his grantor, the •law will not permit the defendants to acquire any title to the premises while in that confidential relation.” But ■even with this qualification, the true principle is not fully presented to the jury, because their attention is not called to the effect of a failure to pay the taxes while that confidential relation continues, and the acquisition of a title derived therefrom subsequent to the termination of such relation. The first and second instructions given at the instance of defendants are open to the same criticism as that one given by the court of his own motion.

4. Estoieeu; rule explained. Another question in the record is presented by the fourth instruction given at the instance of defendants, to which we have heretofore referred. The defendant, John T. Weaver, testified that, acting as agent for his co-defendant, he bid off’the property at the sheriff’s sale; that prior thereto in several conversations he was _ a(jvjse(j by plaintiff to purchase, as he (Weaver) was in possession and would not lose much; and upon his replying that plaintiff had better buy, as he (plaintiff,) had a deed from his father, the judgment-debtor was told that the deed was only to prevent the old lady (Nancy ’Carithers) from getting the property, and that if defendant bought he should not be disturbed; and that he relied and acted on these statements in making the purchase. Upon this testimony the court gave this instruction : “ 4.-If the jury believe from the evidence that the plaintiff at or before the sheriff’s sale urged and advised the defendant to purchase said property, and that the plaintiff, in so doing said that he never intended to-use the deed he had obtained from his father to disturb them in their possession, and if the jury further believe that the defendants were in anywfse influenced and induced to purchase the property in consequence of such declarations by plaintiff, they must" find for defendant.”' In this also, we think, was error. Estoppels in pais are upheld to prevent gross injustice in cases where one party, having rights in property, by representations or conduct in reference thereto, fraudulently induces another to part with value for that property, and thereafter insists-on those rights to deprive the latter of both value and property. But where the latter party loses nothing by permitting the former to assert his legal rights, the reason for upholding estoppels fails. In this case there was no concealment by the plaintiff of any claim, or any fact. The defendant knew at the time of his purchase of the existence of a deed from plaintiff’s father, the judgment-debtor, to plaintiff; knew that plaintiff by reason thereof had the right to redeem at anytime w:thin two years; knew what interest he could purchase and was purchasing in the property; paid the least amount he could pay to acquire that interest; knew that before he could be deprived of that interest he was entitled to receive, as he was in fact afterward offered, all he paid with large interest up to the time of redemption. Surely, he cannot claim to have been in any way mislead as to the facts. But he says plaintiff promised not to redeem. What consideration was there for the promise? The plaintiff received nothing — the defendant parted with nothing, for that promise. He paid for an interest in the land, and paid the least amount for which that interest could be sold; lie obtained that interest, wbicb was fall equivalent for the money he paid. It was therefore a promise without consideration, and binding on no one.

In regard to the third instruction given at the instance of the defendants, that in reference to a conveyance of the homestead, we have looked through the record carefully and see no testimony which would make an such instructions applicable to the case.

For these reasons the judgment of the court below must be reversed, and the case remanded for further proceedings.

All the Justices concurring.